First, I would quilt in the ditch around each of the applique pieces. Depending on the size of the applique pieces, I might do some echo quilting within the applique using 1/4" to 1/2" intervals, again depending on the size of the applique pieces. This would look especially nice in the star pieces. Then I would just do some wavy patterns or flattened cloud patterns in the remaining background of the quilt, avoiding the applique pieces. I would not worry about quilting around the letters on the back of the quilt. Just forget they are even there and quilt away. Depending on the look you are going for and your confidence level, you could choose contrasting, matching or invisible thread. If your confidence level is high and you want the quilting to stand out, use a contrasting thread color. Otherwise, use a matching or invisible thread.